25 May 2021
Posted in Banking
Lyon, Paris, Madrid, Barcelona, London and Manchester to witness faster economic recovery in 2021, says GlobalData
The easing of lockdown restrictions and effective rollout of vaccines have boosted market sentiment in Europe. With economic recovery gathering pace, the combined real GDP of the 20 major Western European metropolitan areas is forecasted to grow by 4.34% for 2021, according to GlobalData, a leading data and analytics company. Among the most affected regions, the metropolitan areas of Lyon, Paris, Madrid, Barcelona, London and Manchester are forecast to recover at a faster pace, with projected economic growth of above 5% in 2021 – compared to other areas in Europe. Major economic drivers for this recovery include growth in manufacturing and service sectors due to a rise in external demand along with effective vaccine rollouts for H1 2021.
Gargi Rao, Economic Analyst at GlobalData, comments: “COVID-19 has had a serious impact on major European metropolitan areas. According to GlobalData, the combined real GDP of the 20 Western European metropolitan areas contracted by 7.8% in 2020, with more than a 10% decline recorded for certain metropolitan areas in the UK, Spain and Italy. However, green shoots of recovery have been noted in key macroeconomic indicators, and this is expected to strengthen over the medium term thanks to a rapid vaccination drive throughout the region.”
As tourism and hospitality remains a major contributing sector in most European metropolitan areas, governments are inclined towards introducing incentives to boost the sector in 2021. For example, France announced five million discounted train tickets to top destinations including Paris and Lyon.
Ralph Hollister, Travel and Tourism Analyst at GlobalData, comments: “Many European countries have done, and will continue to rely on tourism to create a significant contribution to GDP, such as Spain. Therefore, tourism is vital for stimulating economy recovery, whether this is in the form of domestic or international tourism. Incentives will play a big part in increasing traveler confidence, especially ones that make the cost of traveling cheaper. According to GlobalData’s Q1 2021 Consumer Survey, 62% of global respondents are either ‘quite’ or ‘extremely’ concerned regarding their personal financial situation.”
According to GlobalData, the machinery and equipment sector witnessed a high rate of output growth in April 2021 and manufacturing Purchasing Manager’s Index (PMI) in Europe stood at 63.4 in April 2021, compared to 63.3 in March 2021. Germany led the factory upturn, whereas France’s factory expansion slowed slightly.
Rao continues: “GlobalData forecasts that the combined real GDP of the 20 major metropolitan areas in Europe will expand by 2.24% in 2022 as economic recovery continues its upward trajectory.”